BRICS: Future Checkpoints

2 july 2014

Georgy Toloraya is Director of the Asian Strategy Center at the Institute of Economy of the Russian Academy of Science and works for the “Russkiy Mir” Presidential Foundation as Chair of Regional Programs and CEO of the Russian National Committee on BRICS Research. He is also a professor at MGIMO (Moscow University of International Relations).

Resume: When Goldman Sachs’ economist James O'Neill invented the abbreviation BRIC(S) in 2002, he referred to promising investment markets. BRICS today can’t be treated narrowly as a set of emerging economies, the global economy’s "semi-periphery"?— those views are from the last decade.

Centripetal tendencies

Search BRICS online and you’ll most likely discover reviews of the problems faced by group members; the "crisis", contradictions, etc. There may yet come recommendations on "overcoming the BRICS era" — an attention shift back to more successful emerging economies. The West’s desire to downplay BRICS is under­standable: part of the establishment treats it as a nascent union of competitors grouped around Russia and China capable, as many believe, of offering a real and fundamental challenge to the United States and the West.

Indeed, almost all BRICS’ growth rates are slowing. The IMF’s 2014 forecast predicts Brazil at 2,3%, Russia — 2%, China — 7,5%, India — 5,4% and South Africa — 2,8%. Econo­mic problems are being solved slowly, global competitiveness is not growing and political problems are obvious.

 Of course, all of these factors negatively affect BRICS overall impact, especially given US power, Europe’s acute-crisis stage and "abenomics" in Japan. If we conceive of BRICS only as rapidly developing markets then growth retardation investment climate issues should be considered evidence of the group’s "decline" or a future of hopelessness. But is the cohesion of the union weakening? It seems that the need for collective action is the necessary response to a weakening in global competitiveness, to jointly develop measures that strengthen their positions in the international marketplace.

BRICS evolution has been considerable, though nonlinear. It is not only geo-economic but also a geopolitical grouping –despite contradictions between member countries, their weak technological and financial positions as well as the lack of a clear institutionalization roadmap. However, centripetal tendencies dominate, at least for now, in the union. The coincidence of the five countries’ interests is greater than their differences: they are all characterized by comparable technological levels and weight in global policy and economy; a significant state role in the economy; a desire to change the existing order and a commitment to the primacy of international law. Moreover, the group unites in relation to global problems and their solutions.

Intercivilizational project

BRICS has outgrown a mechanical connection to profitable markets long ago and has become an independent phenomenon in international life. This is a union of trade and economic reformers and in the future, probably, of global governance.

In fact, BRICS is the first intercivilizational project for elaborating international and global social norms. Its raison d'etre — an attempt to change the geopolitical and geo-economic system which emerged in the second half of the twentieth century. That is why the West substitutes concepts: it seeks to divert expert and public attention from BRICS’ true meaning.

The move towards establishing interstate association is largely a response to global economic imbalance and political chaos in the post-bipolar world from the largest — but dependent from the global centers of decision-making — countries. The reality forced BRICS members to establish a mechanism for promoting their interests, where they could participate in making decisions that are important for them. A unit with consolidated positions was formed within the G20 (a kind of "world government").

Besides economy and ecology, security and international stability issues should inevitably shape BRICS’ agenda. Despite divergent opinions within the group (for example on Russia-Ukraine tensions) the main thing is that BRICS is an alternative to the "west-oriented" platform for discussing geopolitical evolution.

Today BRICS is an elitist project based largely on political will. However, it should not be simplified nor presented as "anti-western". The fact that all BRICS countries substantially consider Euro-Atlantic values as an example to follow (adopted, of course, to local conditions) and understand the impossibility of rupturing existing financial and economic architecture. For all BRICS Western states represent the main source of technology and investment, as well as a trading area.

The BRICS countries exhibit very different political systems, economic development models and civilizational identities. However they do not make unification their main goal.

Some see BRICS as a group of Southern coun­tries designed to withstand the North. Deve­­lopment goals can only be achieved in cooperation with the West, not through confrontation. Russia’s mission is in fact closer to the West than to BRICS partners, based on finding a common denominator, modernization agenda and organizationally strengthening the union.

The forerunner to BRICS was actually a strategic axis: Russia — China. While the RIC format appeared later, China and Russia remain the main driving forces of the unit. India now holds quite a restrained position, notwithstanding issues with China (although Delhi’s backing for the BRICS Development Bank may have eased tensions). South Africa has stepped up its involvement to meet its responsibilities as 2013 Chair, going so far as to claim it represents the interests of the entire African continent. This year Brazil picks up the baton and seems set on using it to enhance foreign policy across the board. The involvement of countries from all regions in dialogue with BRICS is expanding. Russia, who will chair in 2015, can obviously draw in CIS countries as well.

There is, however, an opinion that the BRICS is "star-shaped" and centered on China, with whom each member has more extensive links than with each other. But after all, the entire global economy is now tied to China. Beijing may be doomed to play a leading role in BRICS simply by virtue of economic power. Any overhaul of the global financial and economic system that reduces unilateral advantages for the West means first of all a win for China.

As declared at the 2012 CPC Congress, by 2049 China will become "a rich, powerful, democratic, civilized and harmonious modern socialist country", that is, the world's economic leader.

But politically Beijing itself does not seek (at least not yet) to dominate the group, realizing not only Western countries but BRICS members too will oppose the "Chinese project for restructuring the world".

For the benefit of the entire global community

To preserve its viability, BRICS should become a "gentlemen's club" uniting players with equal voting rights, i.?e. actually limiting China's ability to make decisions unilaterally, without regard to the interests of other partners. Such a scenario is in the interests not only of the BRICS countries, but also of the entire global community.

At the 2013 BRICS Summit in Durban the leaders declared: "Our goal is the progressive development of the BRICS and its transformation into a full-scale mechanism of current and long-term coordination on a wide range of key issues in the world economy and policy… In the days of restructuring of the global economy, we are committed to developing new models and approaches to more equitable development and comprehensive global growth… "

BRICS short term goal is to improve member interaction, solidify organizational principles and strengthen its position in the international arena. Long-term there may be a gradual transformation from informal dialogue and co-ordination tool into a full-scale mechanism for strategic interaction on key issues. The first "BRICS Institution" — the Development Bank — can play an important role here. Quotas and HQ location are not agreed but will be resolved. Expanding BRICS further is not excluded — in particular, including a country representing the Islamic world, such as Indonesia, is possible.

Following the summit in Durban BRICS established an Expert Councils Centre to promote a science-based development strategy and serve as a platform for expert exchanges. That Russia initiated such a project is pleasing (the first CRIC representatives conference was convened in Moscow in 2008) but it imposes great responsibility on the Russian academic community, which is expected to provide intellectual leadership. The role of scientific method in group progress — at least at this early stage — is extremely important.

Experts from the five countries are finishing agreed recommendations for leaders and governments regarding long-term BRICS development. "Five pillars" define priority cooperation areas:

  • economic development (both within BRICS and international organizations);
  • maintaining global peace and security;
  • promoting social justice, sustainable development and decent quality of life;
  • reforming global economic and political governance to enhance the role of BRICS members and developing countries in polycentric world system;
  • innovations and "knowledge economy" development.

In the center of Russia's foreign policy strategy

What are Russia’s aims in the “Rising Powers Club”? Some Russian scientists and publicists believe Moscow’s presence among developing countries is artificial; their economic growth is based on excess cheap labor and Russia’s on rising energy prices. To them the Russian-type economy is much closer to Eastern Europe, and Russia should turn its intellectual resources, rather than cheap labor or raw materials, into the basis for growth.

However in practice — and first of all for geopolitical reasons — BRIC & BRICS became a central foreign policy innovation throughout the ‘noughties’. For Russia participation in BRICS represents the opportunity to take its rightful place in global governance system and use this for its own modernization. This is especially relevant given tensions in the G8 over Ukraine.

 In 2006, President Vladimir Putin proposed the closer ties in the format of "the four". During Dmitry Medvedev’s presidency BRICS got a free pass at the highest possible level: annual meetings of Heads of States and Governments began. In one of Putin’s articles on the eve of the 2012 elections it was said that Russia is going to continue to give "high priority to interaction with BRICS partners. This unique structure, created in 2006, most vividly symbolizes the transition from unipolarity to a more equitable world order".

Putin approved a BRICS participation concept in February 2013 that emphasized BRICS as "one of the most important geopolitical events since the beginning of the new century" that had rapidly become "a significant factor in global policy". BRICS reflects polycentric international relations, it is a new model for global relations that transcends old East/West, North/South polarities.

Russia’s role — representing North and South — is to use this advantage for harmonious global economic development and to ensure peace and stability in the world.

| Russian View

} Page 1 of 5